Implementing General Anti-Avoidance Rules (GAAR) in Nigeria: Revisiting Oando Plc vs FIRS (Oando IV) (2014) 16 TLRN 99 and the Excess Dividend Rule Under Section 19 of the Companies Income Tax Act

Abstract

This paper reviews the Excess Dividends Tax (“EDT”) rule contained in Section 19 of the Nigerian Companies Income Tax Act (“CITA”) as a veritable means of curbing tax avoidance and/or tax evasion in Nigeria, and argues that notwithstanding the weight of argument against the EDT rule, the EDT regime ought to be strengthened, albeit, with sufficient and clear modifications to enable its smooth and efficient administration. As presently interpreted in Oando Plc vs FIRS (Oando IV), the EDT seeks to impose additional corporate tax on retained earnings or the Franked Investment Income (“FII”) of a corporation, and that would amount to, in practical terms, double taxation.